12 Smart Things to Do with Your Tax Refund
6 Money-Smart Uses for Your Tax Refund
Yes, HMRC does refund overpaid tax, sometimes automatically and sometimes through the refund application process. It's important to keep on top of your tax position because there are time limits on when you may make a claim for overpaid tax and apply for your tax rebate.
Buy your financial freedom
If you have credit card debt, paying it off is the best investment you can make with your tax refund. ... If your refund doesn't cover the entire outstanding balance, look into rolling over your remaining debt to a balance transfer credit card with a lower interest rate.
Get a Bigger Tax Refund: Claim Your Credits
For example, if you owe $6,000 in taxes and claim a credit worth $1,000, your bill drops to $5,000. Certain credits may even be refundable, which means you can claim them even if you don't have any tax liability.
9 Ways You Shouldn't Spend Your Tax Refund
Mandatory. Mandatory spending consists primarily of Social Security, Medicare, and Medicaid. Several welfare programs are smaller items, including food stamps, child tax credits, child nutrition programs, housing assistance, the earned income tax credit, and temporary assistance for needy families.
Invest your tax refund to meet short- and long-term goals.
Or you could work toward a long-term goal, such as buying a home. Saving your tax refund each year can help you increase the down payment you make on a home, which could mean a smaller monthly payment.
Tax Refund arises when taxes paid are higher than your actual tax liability (including interest). It could be in the form of advance tax, self-assessment tax, tax deducted at source, foreign tax credit etc. Given below is an illustration showing when and how a refund arises.
If you think you have paid too much tax through your employment and the end of the tax year in which you overpaid tax has already passed, you can make a claim for a refund by contacting HMRC. There is more information on how to do this, including example letters, in the tax basics section.
If you think you might be due an income-tax refund and want to check your tax refund status, call 0300 200 3300 or go to the GOV.UK website. If you're an employee, a common reason for paying too much tax is being given an incorrect PAYE code.
Use the tax checker
The tax checker is quick and easy to use and if the result estimates that you may have overpaid tax it will also tell you how to go about claiming a refund. Get started and use the HMRC TAX CHECKER.
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